Why QUIZ plc (LON:QUIZ) Could Be Worth Watching

QUIZ plc (LON:QUIZ), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the AIM. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy?

Today I will analyse the most recent data on QUIZ’s outlook and valuation to see if the opportunity still exists. See our latest analysis for QUIZ

What Is QUIZ Worth?

Good news, investors! QUIZ is still a bargain right now according to my price multiple model, which compares the company’s price-to-earnings ratio to the industry average.

In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that QUIZ’s ratio of 3.98x is below its peer average of 11.24x, which indicates the stock is trading at a lower price compared to the Specialty Retail industry. Although, there may be another chance to buy again in the future.

This is because QUIZ’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from QUIZ?

earnings-and-revenue-growthAIM:QUIZ Earnings and Revenue Growth March 31st 2023

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price.

With revenues expected to grow by a double-digit 13% over the next couple of years, the outlook is positive for QUIZ. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? Since QUIZ is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price.

However, there are also other factors such as capital structure to consider, which could explain the current price multiple. Are you a potential investor? If you’ve been keeping an eye on QUIZ for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy QUIZ.

But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed assessment. Keep in mind, when it comes to analysing a stock it’s worth noting the risks involved. At Simply Wall St, we found 1 warning sign for QUIZ and we think they deserve your attention.

If you are no longer interested in QUIZ, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Valuation is complex, but we’re helping make it simple.

Find out whether QUIZ is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation.

We aim to bring you long-term focused analysis driven by fundamental data.

Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Simply Wall St has no position in any stocks mentioned.

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